A system that allows Australian investors to trade shares listed on the US-based Nasdaq exchange is on-hold until after January 1, in order to avoid potential millennium bug glitches.
An agreement between the Australian Stock Exchange and the Nasdaq, will ultimately let Australians trade US technology stocks, in local currency. However both exchanges will "wait until after y2k is out of the way," according to ASX spokeswoman Gloria Peterson.
"Any co-trading won't happen until after the New Year," Peterson told PC Week.
As part of the alliance, the two boards have agreed to develop the technology infrastructure to support co-trading services to investors, enterprises, and other market participants.
"We have both conducted y2k tests that have gone well, but considering how many companies we depend on, it seems wise to wait until everyone is through the last minute crunch," Peterson said.
"There are 5000 companies listed on the Nasdaq and 1200 on the ASX, each one of those 6200 companies has to be ready. Then there are all the brokers and banks involved. It would be prudent to wait."
Which US stocks will be available through the alliance has not yet been decided, according to Peterson. "An example would be, if we decided to take the top 100 companies on Nasdaq and allow Australians to trade these shares, they could buy through us and we would complete the transactions for them. That's where both systems need to be compatible."
Nasdaq will also consider listing appropriate ASX index-based products in the US, which could be a much-needed boost for Australian technology companies and can also boost the Australian market.
"Companies that have listed on the ASX and another exchange have resulted in more trading in both markets. At first we were concerned that it would take away from our market, but trading usually grows."
Companies wanting to co-list will not be delayed by millennium-bug fears. "We hope to see some co-listing soon. If companies want to they can do it now and we would be working through the process as we go. Nasdaq has already had some queries and I have had some."
The co-listing approach available through the ASX-Nasdaq allaince should make entering both markets a less expensive exercise. This includes basic savings on the cost of preparing documentation for both markets. "We will help companies develop documents that comply with regulations in both systems."
